Professor Muhongo berates shoddy contracts, orders end to rationing

By Guardian on sunday correspondent

20th May 2012

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Minister of Energy and Minerals Professor Sospeter Muhongo

Newly appointed Minister of Energy and Minerals Professor Sospeter Muhongo has warned that his office will not administer any controversial contracts. All existing shoddy contracts will be reviewed, he said while ordering the national Electricity Supply Company (Tanesco) to bring power rationing to an end.

Prof. Muhongo made the strong statement in Dar es Salaam yesterday at a meeting with Tanesco employees in Dar and in Coast region held at the company’s head offices in Ubungo.

The minister stated that Tanzanians did not benefit from those contracts as Tanesco failed to operate efficiently, leading to low supply of electricity. Only 18 percent of Tanzanians are connected to electricity, he said.

“The government has already signed shoddy contracts that are now a burden to Tanzanians. We are now reviewing them; we take it as a lesson and I promise that I will never sign such contracts on current terms,” he declared.

Since its inception in 1930 Tanesco has managed to supply electricity to only 18 percent of the population, to which there are projections that by year 2015 the percentage should be raised to 30 percent. However this target would hardly be met due to various problems facing Tanesco, he stated.

Bryson Kajala, a Tanesco employee, said the company continued to experience losses as it purchased power at a high price of Sh500 and sell as low as Sh221 per unit (kilowatt hour), noting that no appropriate intervention has been taken by the government to rescue the company from such operational disadvantage.

Firms having contracts to sell electricity to Tanesco include Songas, Symbion (T) Ltd, Agrekko and Independent Power (T) Ltd (IPTL)

The government pays up to Sh3 billion shillings to IPTL alone per month.

Mr Abdul Ismail, the chairman of the Tanesco employees welfare negotiating team said the government was the main source of the company’s bad financial state as it doesn’t pay for the power it consumes.

Other contributors criticized the government for its decision to privatize the farm producing hard wood trees and treatment plant to obtain poles for distribution of electricity in Mbeya.

They said the decision resulted in a rise of expenses related to power connection to most of the country, with connection costs ranging from Sh0.4m to Sh1.5m for subsidized single phase customers mainly in rural areas, and three phase customers respectively.